Changes to the Residential Care Subsidy asset threshold

How the asset threshold is used in assessment for the Residential Care Subsidy

What is the asset threshold?

The asset threshold is a key factor in working out how much older people contribute to the cost of their long-term residential care. The asset threshold is set at a new level on 1 July every year. If the person’s assets are equal to or below that level then they qualify for government funding through the Residential Care Subsidy to meet the cost of their care in a rest home or continuing care hospital.

What is changing?

From 1 July 2012 the asset threshold that is used in a person’s assessment for the Residential Care Subsidy will increase by the consumers price index (CPI) every year, instead of by $10,000 per year.

What is not changing?

There is no change to the residential loans scheme. People, whose assets are over the applicable threshold, primarily because they own their former home, may be eligible for an interest-free residential care loan if they meet the criteria. You can find more out at Work and Income New Zealand.

What will the asset threshold change from and to on 1 July 2012?

From 1 July 2012, the asset threshold will increase from $210,000 to $213,297 for single people or a couple where both are in care.

For a couple where only one is in long term care, they can choose either:

the asset threshold of $213,297 (the 1 July 2012 threshold) or

the alternative asset threshold of $116,806 (the 1 July 2012 threshold) where the family home, car and a pre-paid funeral of up to $10,000 are exempt assets.

After 1 July 2012, the threshold will increase by the CPI on 1 July each year.

From 1 July 2013, the asset threshold will increase from $213,297 to $215,132 for single people or a couple where both are in care.

For a couple where only one is in long term care, they can choose either:

the asset threshold of $215,132 (the 1 July 2013 threshold) or

the alternative asset threshold of $117,811 (the 1 July 2013 threshold) where the family home, car and a pre-paid funeral of up to $10,000 are exempt assets.

What is the consumers price index?

The consumers price index (CPI) is a measure of inflation based on the rate of price change of goods and services purchased by households. You can find out more at Statistics New Zealand.

What the change means for you?

If you have already been assessed as eligible for the Residential Care Subsidy prior to 1 July 2012 this change does not affect you.

If you have been assessed as having assets with a value above the current threshold, you will be affected by this change. It may take longer for the value of your assets to reduce to the threshold and for you to become eligible for the Residential Care Subsidy.

What happens if a person’s assets are worth more than the asset threshold?

If a person’s total assets are worth more than the asset threshold, they will have to pay the maximum contribution towards the cost of their care until their total assets reduce to the threshold. People whose assets are over the asset threshold, primarily because they still own their former home but no longer live there, may apply for a residential care loan.

What happens if I apply before 1 July 2012?

If you have been needs assessed as requiring residential care and apply before 1 July 2012 your assets will be assessed using the current threshold ($210,000 for a single person or $115,000 for a couple). If you apply after 1 July 2012, the new CPI-adjusted threshold will be used.

My assets are not worth as much as they used to be. Can I be reassessed?

Yes. If you have previously been declined a subsidy due to the value of your assets, you can apply for reassessment. Please contact the contact the Residential Subsidy Unit free helpline 0800 999 727.